US president Barack Obama's talks with Congress leaders fail to end government shutdown

US president Barack Obama's talks with Congress leaders fail to end government shutdown

Updated 3 October 2013, 10:14 AEST

By North America correspondent Michael Vincent, wires

Talks between US president Barack Obama and top Republican leaders Wednesday failed to end a government shutdown, with both sides accusing the other of refusing to move off hardened positions.
The meeting comes as America's National Intelligence chief James Clapper warns that the shutdown is seriously damaging to national security.
Mr Obama has also been forced to cancel visits to Malaysia and the Philippines next week as he grapples with the political stalemate and he is still considering whether to go ahead with the remainder of his Asia trip to Indonesia and Brunei.
"Absolutely I am exasperated, because this is entirely unnecessary," Mr Obama told CNBC of the shutdown, which has forced about 800,000 government workers onto unpaid leave.

The government shutdown has made it logistically impossible for US president Barack Obama to visit Malaysia and the Philippines. (Credit: AFP)

Talks between US president Barack Obama and top Republican leaders have failed to end a government shutdown, with both sides accusing the other of refusing to move off hardened positions.

Mr Obama, meanwhile, sent Wall Street a blunt warning that it should be very worried about a political crisis that has paralysed the federal government and could yet trigger a debt default.

The president met for more than an hour with Republican House Speaker John Boehner, Senate minority leader Mitch McConnell, Senate Democratic leader Harry Reid and House Democratic boss Nancy Pelosi.

But there was no sign that the talks made headway in ending a dispute that has sent hundreds of thousands of federal workers home, shuttered museums and national parks and threatens to dampen already sluggish economic growth.

"The president reiterated one more time that he will not negotiate," said Mr Boehner after emerging from the West Wing talks.

Analysis from The Drum

"All we're asking for here is a discussion and fairness for the American people under Obamacare."

Senator Reid and Ms Pelosi, meanwhile, accused Republicans of trying to hold the president hostage over Obamacare.

Mr Reid said Mr Obama told Republicans "he will not stand" for their tactics.

As hundreds of thousands of federal employees faced a second day without pay, leaders of the Republican-controlled House of Representatives and the Democratic-led Senate reportedly offered only token concessions that were quickly dismissed by the other side.

The meeting comes as America's National Intelligence chief James Clapper warns that the shutdown is seriously damaging to national security.

Mr Obama has also been forced to cancel visits to Malaysia and the Philippines next week as he grapples with the political stalemate and he is still considering whether to go ahead with the remainder of his Asia trip to Indonesia and Brunei.

"Absolutely I am exasperated, because this is entirely unnecessary," Mr Obama told CNBC of the now two-day shutdown that has forced about 800,000 government workers onto unpaid leave.

White House spokesman Jay Carney said before the congressional meeting that Mr Obama would not accept changes to his Obamacare health laws.

"He will not negotiate. He will not offer concessions to Republicans in exchange for not tanking the economy," he said.

"The president's approach from the beginning is he's asking for nothing. Nothing from Republicans.

"He's attaching zero to the general proposition that the Congress should open the government."

The meeting will include the four top leaders in Congress - House of Representatives speaker John Boehner, House Democratic leader Nancy Pelosi, Senate Democratic leader Harry Reid and Senate Republican leader Mitch McConnell.

National security seriously at risk as shutdown continues

Meanwhile, James Clapper has used a Senate hearing to warn of the national security consequences for the shutdown.

"I've been in the intelligence division for about 50 years now, I've never seen anything like this," he said.

"On top of the sequestration cuts we're taking, this seriously damages our ability to protect the safety and security of this nation and its citizens."

Mr Clapper says the shutdown and tough economic times could make intelligence staff vulnerable to foreign spies.

"This is a dreamland for foreign intelligence services to recruit, particularly as our employees, already many of whom subject to furloughs driven by sequestration, are going to have, I believe, even greater financial challenges," he said.

The setback to the Asia trip, designed to reinforce US commitment to the region, is the first obvious international consequence of the troubles in Washington.

The president had hoped to use the trip to make progress in concluding initial talks on a trans-pacific partnership trade pact.

Boehner keeps Republicans united behind series of small bills

Despite the disruption, Mr Boehner's Republicans have failed to derail Mr Obama's controversial healthcare law, which passed a milestone on Tuesday (local time) when it began signing up uninsured Americans for subsidised health coverage.

What is Obamacare?

Affordable Care act was passed by Congress in 2010

Promises to help tens of millions of uninsured Americans get health coverage

Policies vary according to person's income, location, family size and level of coverage desired

All Americans must sign up to some form of health insurance by January 1 or face a fine

82.6 per cent of Americans already have health insurance - half get it through employer

17.4 per cent (about 53 million people) are uninsured

Studies project about 30 million of uninsured people still won't get insurance despite Obamacare

Though some moderate Republicans have begun to question their party's strategy, Mr Boehner so far has kept them united behind a plan to offer a series of small bills that would re-open select parts of the government.

The House is expected to vote later on Wednesday and Thursday (local time) on measures that would fund veterans care, medical research, national parks, the District of Columbia and the Army Reserve.

The measures are likely to be defeated in the Democratic-controlled Senate, and Mr Obama said he would veto them if they reached his desk.

"It's time for Republicans to stop throwing one crazy idea after another at the wall in the hopes something will stick," Democratic leader Harry Reid said on the Senate floor.

Mr Reid told Republicans he would engage in talks about tax reform, farm policy and other pressing issues that Congress has failed to address after Republicans agreed to re-open the government without conditions.

Republicans seemed to be less than thrilled with that idea.

The shutdown fight is rapidly merging with a higher-stakes battle over the government's borrowing power that is expected to come to a head soon.

Treasury secretary Jack Lew has said the United States will exhaust its borrowing authority no later than October 17.

The government could have difficulty paying pension checks, interest charges and other bills after that point.

Many Republicans see the debt limit vote as another opportunity to undercut Mr Obama's healthcare law or extract other concessions - an approach that business groups say could lead to disaster.

Stock investors on Wednesday appeared to show growing anxiety over the standoff after taking the news in stride on Tuesday. The Standard & Poor's 500 Index SPX was down 0.32 per cent and the Nasdaq Composite Index IXIC was down 0.22 per cent.

A short-term shutdown would slow US economic growth by about 0.2 percentage points, Goldman Sachs said on Wednesday, but a weeks-long disruption could weigh more heavily - 0.4 percentage points - as furloughed workers scale back personal spending.

The last shutdown in 1995 and 1996 cost taxpayers $US1.4 billion, according to congressional researchers.

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